Dilemma

Before seeking the proto-Nazi Freikorps’ support to crack down on the rising insurrectionary forces in Germany, Ebert reportedly declared “I hate revolution like a mortal sin.” But for Luxemburg reform and revolution had never been opposites: they complemented each other.

At the age of twenty-seven, she had established herself as a major figure in the Second International by offering one of the most comprehensive, coherent, and devastating criticisms to Eduard Bernstein’s revisionist call to prioritize the method of reform to that of revolution. A close friend and collaborator of Engels, a Marxist of impeccable credentials but also a pioneering advocate of gay rights, Bernstein was also the first to articulate a nonrevolutionary path to socialism in what is widely considered the founding text of modern social democracy: The Preconditions of Socialism and the Tasks of Social Democracy (1899). Bernstein’s position had been explicitly discussed (and rejected) at the Stuttgart Conference of the German Social Democratic Party (1898) and is succinctly captured by his famous statement: “the final goal is nothing to me, the movement is everything.” This, Luxemburg emphasized, was a false dilemma. “Can Social-Democracy be against reforms? Can we contrapose the social revolution, the transformation of the existing order, our final goal, to social reforms? Certainly not.” At stake in Bernstein’s dilemma, she argued, was not just a tactical choice, a mere discussion about this or that method of struggle; it was the “very existence of the Social Democratic movement” as a distinctive force in the struggle against capitalism.

The debate essentially revolved around whether democracy and capitalism are compatible; a question still just as relevant today. Bernstein suggested that they were; and the power of his answer and the effect it had on the development of social democracy in the twentieth century cannot be overstated. His defense of the priority of social reform on revolution was based on a number of assumptions, both theoretical and practical, developed from within Marxist materialism

Bernstein insisted that dialectics demanded that scientific findings be reconsidered in light of new empirical results. And in the circumstances of the nineteenth century, capitalism had shown a surprising capacity for adaptation. From the perspective of economic theory there were a number of new developments with which Marxists had to reckon: the intensification of foreign trade, the expansion of the banking and financial sector, the development of the credit system, the consolidation of middle classes, the rise of property owners, and the emergence of cartels and trusts. Together, they meant that economic crises would no longer take the inevitably destructive form Marx had anticipated.

From the perspective of political practice, Bernstein equated representative democracy with the end of class government. On the one hand, the expansion of the franchise, on the other hand the strengthening of workers’ unions and cooperatives as well as the prospects of electoral successes for mass social-democratic parties across Western Europe showed that representative democracy was capable of subordinating capitalism to the imperatives of the democratic state. Democratic citizenship and political emancipation were one and the same project, a project that the social-democratic movement could develop regardless of “the final goal.”

Luxemburg responded to Bernstein in a text entitled Reform or Revolution? (1899). There she essentially argued that while reform and revolution were compatible, democracy and capitalism are not. Her central point had to do with the structure of globalization and the role of nation-states in a financialized economic system. The international expansion of capital, and the development of the credit and debit system meant that the political power of nation-states was instrumental to the consolidation of economic power by monopoly holders, transnational corporations, businesses, and banks.

In response to Bernstein’s remarks on the potential role of credit in avoiding capitalist collapse, she emphasized that financial capitalism and the availability of loans aggravates crisis rather than providing a solution to it. Credit, she argued, encourages speculation and widens the gap between what we would now call the real and the fictitious economy. Indeed, while credit initially stimulates the development of productive forces, it can lead to errors of calculation and overproduction, therefore ceasing to be helpful in the exchange process at the first symptom of stagnation.

Likewise, cartels and trusts, and the other regulatory mechanisms designed to increase coordination among the holders of capital succeed at increasing the rate of profit in internal markets only in virtue of expansion outwards, by selling abroad the products that cannot be absorbed by domestic demand. The other face of apparent market stability in Europe is sharpened competition abroad and anarchy on the world market, the opposite of what cartels intended to achieve.

Capitalism and Imperialism

Luxemburg developed her criticism of revisionism in The Accumulation of Capital: A Contribution to the Economic Explanation of Imperialism (1913). This study of the dynamic structure of capital accumulation contained a critique of Volume II of Marx’s Capital and an attempt to illustrate how capitalism could only survive through its extension to noncapitalist economies. She criticized Marx for analyzing the process of reproduction of capital by assuming a closed system of accumulation and a market with only capitalists and workers, thereby neglecting the economic specificities of entire areas of the world that had not caught up with capitalist development. This closed-system analysis, she suggested, made it difficult to explain how capital is reproduced and valorized in the context of wage depression, growing income inequality, and the related underconsumption of workers in advanced capitalist economies.

Seeking to explain the incentives of capitalist economic development, Luxemburg turned her attention to what economists would later call the relation between the rate of savings and real investments, anticipating important insights of Keynes’s and Kalecki’s theories of stagnation. While Marx had explained the reproduction of capital with reference to the development of technology, competition among capitalists, and a thirst for maximizing profit, she found that this analysis did not do justice to the distinctive structural constraints of capital reproduction. In particular, it did not take account of the necessity to access new markets in order to sell consumption goods that impoverished domestic workers could no longer afford. Yet, in the context of a depressed economy with low demand for consumption goods, without a guarantee of an ever-expanding market, there would be no incentive for investment and no outlet for accumulated capital stocks.

Luxemburg’s core insight is that the expansion of capital in noncapitalist areas of the world by way of conquest, trade, violence, and deception provides precisely such outlet. Cheap mass-produced goods that struggle to be sold in the markets of developed capitalist states because of low patterns of consumption become available in other areas of the world. They create investment opportunities that displace traditional ways of organizing economic life and destroy predominantly agricultural forms of production. They also bring in technological innovations and modernizing projects that modify existing relations of authority and reshape forms of class conflict different from the capitalist one.

While imperial conquest and war guarantee the direct subjection of entire parts of the world to the political control of more developed capitalist countries, more subtle ways of control — for example, in the form of international loans — establish a political and economic dependency that places the foreign and economic policy of young capitalist states directly under the influence of their neocolonial masters. In a financialized economy, with investment comes speculation, and when hopes of increasing rates of profit are disappointed, debt comes to haunt these vulnerable national economies and losses need to be socialized. This triggers a new, even deeper, crisis and the beginning of a new cycle of accumulation.

This focus on the development of noncapitalist areas of the world gave Luxemburg a sensitivity to questions of race, ethnicity, and indigenous rights that was uncharacteristic for the Marxism of her time. Marx and other orthodox Marxists had more or less shared the teleological bias of Enlightenment philosophy by adopting a four-stage theory of historical development whereby nomadic (hunter-gathering) forms of life were supplanted by allegedly more progressive social relations in the form of agricultural, then commercial, society. Recently emerged writings from Luxemburg illustrate that she believed that the models of common property and the distribution of social roles observed in many indigenous communities were in many ways superior to those of commercial societies. She was also one of the pioneers of an analysis of racism and cultural appropriation as distinctive yet integrated components of an analysis of capitalism where economic exploitation and identity-based discrimination mutually reinforce each other.

Against National Self-Determination

Luxemburg’s genuinely internationalist stance helps to explain the second part of her argument against Bernstein’s defense of social reform over revolution: the political perspective. The conquest of a share of decision-making power within liberal representative institutions means very little in the political life of contemporary states dominated by two aspects: world politics and the labor movement, she argued. The mutual dependence between economic and political power in the presence of globalization and the related exploitation of remote areas of the world made Luxemburg a skeptic of theories of political emancipation through self-determination. Here she differed from other Marxist theorists of self-determination (including Lenin) who had argued in favor of national liberation movements when these helped advance socialist goals. For Luxemburg, national liberation movements ended up playing into the hands of liberal ruling elites and weakening the international workers’ movement, even when guided by socialists.

This position against national self-determination was one that Luxemburg consistently maintained throughout her life. It characterized her youth activism in the Polish revolutionary movement, where she argued that it was against the interests of the Polish working classes to become independent from Russia since, without socialist governments in Germany, Austria, and Russia, independence would deepen the exploitation of Polish workers. During her period of activism in the SPD she criticized Kautsky and the SPD leadership for failing to stand up to German imperial projects in Morocco for fear of losing their electoral gains Her final break with German social democracy came during the First World War when elected social-democrat representatives in the Reichstag decided to join forces with nationalist conservatives to support the war against Russia. As she wrote in the 1915 Junius Pamphlet, “So long as capitalist states exist … so long as imperialistic world policies determine and regulate the inner and outer life of a nation, there can be no ‘national self-determination’ either in war or in peace.”

Reformist Politics

The illusion of democracy under capitalism and the illusion of political emancipation through self-determination were different sides of the same coin. Just as in times of war, the social democrats were wrong to think that failing to join the military effort would be interpreted as a failure of patriotism, in times of peace they were wrong to think that electoral advances and the advocacy of social-democratic reforms would by itself entail the end of wage labor domination.

It is important, however, to understand that Luxemburg did not oppose representation in parliament or the fight for trade union and democratic-type reforms. This is particularly clear if one considers her writings on women’s suffrage, which are also an important antidote to the received wisdom among feminists that, unlike her friend and collaborator Clara Zetkin, Luxemburg was largely uninterested in the question of women’s emancipation. Rather, her point was that both the demand for social rights obtained through parliamentary representation and the demand for women’s emancipation ought to be integrated in a more radical critique of capitalism where the key is access to political power and a radical transformation of both the economic and the political structures of society. Just as there could be no progressive national emancipation within capitalism, there could be no gender and racial emancipation either.

Reforms, Luxemburg argued, provided crucial learning platforms through which the mass of oppressed people would develop a capacity for autonomous decision-making and prepare for the conquest of political power. Yet such reforms were trials of freedom, they were not freedom itself. This was reflected in her criticism of centralized models of political organization (including her engagement with Lenin on the idea of the vanguard) and her theory of the party as rooted in the spontaneous initiatives of masses. They were essential components to an analysis of freedom and democratic agency which global capitalist social relations obstructed at a very deep level

This is also why, as she argued in response to Bernstein, work for reforms should not be understood as “a drawn-out revolution, “and revolution should not be understood as “a condensed series of reforms.” As Luxemburg explained, historically, legal reform served the purpose of consolidating an emerging social class until the balance of political forces was such that the existing juridical system could be eventually dismantled in favor of a new one. This is precisely what the terms “reform” and “revolution” meant — they suggested a radical change in the content of fundamental legal dispositions rather than in the manner of their realization.

As she put it, legal reform and revolution are not different methods of historical progress that “can be picked out from the counter of history as one picks out hot or cold sausages.” Those who opposed the method of legal reform to the goal of conquering political power by the workers do not oppose “a more tranquil, calmer and slower method to the same goal”; they choose “a different goal.” They choose surface improvements of an old order over the principled commitment to the creation of a new one. In opposing reform to revolution, they divorce democracy from socialism; in doing so, they end up losing both.

Rosa Luxemburg was one of the last truly revolutionary socialists. She was also one of the last true social democrats in the sense of a commitment to both uncompromising socialism and uncompromising democracy. Freedom, as one of her most famous sayings goes, is always the freedom of those who think differently. She understood that overcoming capitalism was not a matter of raising taxes, tweaking the system of distribution of opportunities here and there, improving the condition of workers in this or that country. Socialism entailed a commitment to a different kind of society, where the principle of the free development of each individual is incompatible with the pursuit of profit for profit’s sake but also with technocratic hierarchies and the bureaucratic management of political life. Socialism was a project of both economic and political emancipation. It was a global, not a national, commitment. The conquest of seats in parliament divorced from a global effort to establish truly cooperative social relations in every corner of the world was not only worth very little, it was also most likely ephemeral.

As traditional social-democratic parties around Europe today struggle for their life, the ghost of Rosa Luxemburg should come to haunt them. Her death one hundred years ago symbolizes the death of a Left that abandoned its revolutionary and internationalist aspirations and turned into a national project of domesticating capitalism. But her life and work, her study of globalized capitalism, her uncompromising defense of internationalism, and her analysis of socialist strategy rooted in collective education and mass political action are as relevant today as they were a century ago.

As we strive to build a radical left alternative that is both pragmatic and oriented by principles, that pursues social reforms without abandoning its transformative socialist aspirations, Rosa Luxemburg is our contemporary rather than our martyr.